Mr Prime Minister, your words do not match your actions

In an impromptu debate in the Lok Sabha on the tragic suicide of farmer Gajendra Singh in New Delhi, Prime Minister Narendra Modi expressed pain and said that farmers cannot be left to fend for themselves. He admitted that the problem afflicting the farmers is old, deep-rooted and wide-spread. While the PM appeared to be concerned about farmers’ crisis, his government’s actions on the ground tell quite an opposite story. According to the National Crime Records Bureau, about 3 lakh farmers
have killed themselves in India since 1995, with an average of 46 farmer
suicides every day.
As the parliamentarians’ debate has brought focus on agricultural crisis, we review major flaws in the new Land Acquisition Bill (2015 Bill) that the government is trying hard to push, and what it could possibly do to correct them.

The 2015 Bill is fraught with several clauses that are outright anti-farmer. The major anti-farmer changes that it makes as compared to the 2013 Land Acquisition Act are:

(i) The condition of taking consent of 80% and 70% of affected land losers in case of private projects and PPP projects respectively has been removed for projects belonging to five areas – industrial corridors, PPP projects (excluding private hospitals and colleges), rural infrastructure, defence and defence production, and affordable housing – in which practically any private project can be included;

(ii) Social Impact Assessment too has been exempted for projects in those five areas;

(iii) The prescription to limit and avoid multi-crop land for industrial acquisition has been removed, compromising India’s food security;

(iv) If an offence is committed by a government official or the head of a department in a land acquisition process, no citizen can file FIR or go to court for the official’s prosecution without prior sanction of the government.

One positive step in the 2015 Bill is the inclusion of all sixteen Acts under the higher compensation scheme in which previously only three Acts were covered. However, removing the consent and social
impact assessment clauses renders this step insignificant as one of the purposes of impact assessment was to identify the affected people and estimate the extent of damage for compensation.

Even though the 2013 Act had many shortcomings, it was a small democratic step towards recognizing farmers’ right over their land and giving them a negotiating space with respect to other agencies acquiring land such as private businesses and governments. The shortcomings needed to be removed by making the Act even more democratic. However, this government has reversed those small democratic gains of the 2013 Act in the name of facilitating private industries and ‘Make in India’.

Why is the 2015 Land Bill undemocratic and anti-farmer?

By legalizing forcible acquisition of all kinds of farmlands for industrial corridors and PPP projects without taking landowners’ consent, without carrying out impact assessment, and mandating citizens to seek government’s permission before lodging complaints of wrongdoing, the 2015 Bill in effect envisages the government to act as a dictator working on behalf of private industry.

The government, in pushing this Bill, makes a bizarre assumption that private industry’s growth at the cost of farmers’ well-being is in national interest. It views farmers as intransigent stakeholders who are a roadblock to country’s progress. It presumes that farmers typically have irrational and ulterior motive when they object to acquisition of their land for private industry despite being given compensation. At the same time it places faith on private businesses of typically having rational and trustworthy motive when they wish to acquire farmlands. Therefore, the government and supporters of its Land Bill equate private industry’s interest to national interest and see farmers and their supporters who raise concern as villains in India’s growth story. They try to describe those opposing the 2015 Bill as either acting against national interest or being trouble-monger anarchists.

Anyone who believes in democratic processes can make out that the government’s logic is obviously flawed. Both farmers and industries are among the major stakeholders in the nation’s development process. In fact majority of farmers’ economic situation is precarious even though they work as primary food producers for the rest of the population. As farmers carry out the most important role for economy and society, and have been a vulnerable lot for decades, their progress must be integral to India’s development process. At the minimum the government ought to be creating a policy environment that views farmers among key stakeholders and provides them a good negotiating right, at least as much as industry, in all processes of development that impact them such as land acquisition. This is what a democratic process would demand.

What should the PM do to measure up to his words for farmers?

It is strange that amendments to the 2013 Act are being proposed citing shortage of land for industry, whereas lakhs of acres of unutilized lands are already lying with the Central and State governments. The first thing the government can immediately do is to clear the legal and bureaucratic hurdles blocking those lands and let them be used for infrastructure, industrial corridors, PPP projects, affordable housing, defence and other developmental needs. Freeing up even half of unutilized lands lying with the governments can possibly meet most of these needs for the next several years.

Secondly, the government must reverse the undemocratic changes it has proposed in the Bill, grant the farmers strong negotiating right, reinstate provisions of consent and social impact assessment, bring in private as well as most of government projects in the purview, and assure India’s food security by forbidding industrial acquisition of multi-crop lands. In addition, it must retain all sixteen Acts under improved compensation scheme as it has rightly proposed in its Bill. Given the present reality, however, compensation of four times the market price for rural land and twice for urban land may not materialize for farmers because almost everywhere the circle rate of land set by local authority is less than the prevailing market rate. Therefore the government needs to come up with an efficient process that uses ongoing market rates rather than circle rates in calculation of compensation, and revises them frequently.

Thirdly, the government must alter and overhaul the ‘Make in India’ strategy so as to include small-medium farmers, small-medium manufacturers, and small-medium engineers and designers as core stakeholders in indigenous supply chains. Thus valuable competencies will be built domestically, most of economic surplus will remain in India, and our farmers and entrepreneurs can become active participants and owners in the development process. In addition, it will be best for the economy if major portion of these supply chains’ output serves domestic markets. Investments needed by farmers and entrepreneurs must be financed by domestic banks.

As of now the ‘Make in India’ strategy seems to focus too much on inviting multinational companies to invest in manufacturing facilities in India. Role of FDI should be only supportive rather than the core of India’s economic development, and be limited to areas in which Indian industry does not have ability to build manufacturing or technological competence. Therefore ‘Make in India’ strategy’s core must be revised to replace FDI with domestically financed small farmers and small manufacturers who constitute overwhelming majority of India’s agriculture and industry. A strategy that connects small farmers to local clusters of small manufacturers, designers and markets can meet multiple goals of employment, creation of domestic surplus and economy, equitable wealth distribution and sustainable development.

Dr Rahul Pandey, CNS Columnist27 April 2015(The author is an academic-entrepreneur-activist, an adjunct faculty at IIM Lucknow, and was formerly a faculty member at IIT Bombay and IIM Lucknow. e-mail: rahulanjula@gmail.com )